FinTech Credit and Entrepreneurial Growth

Harald Hau, Yi Huang, Hongzhe Shan and Zixia Sheng
Additional contact information
Yi Huang: Graduate Institute of International and CEPR
Hongzhe Shan: Swiss Finance Institute, Swiss Finance Institute, Students
Zixia Sheng: New Hope Financial Services

No 21-47, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Based on automated credit lines to more than two million vendors trading on Alibaba’s online retail platform, we show how the take-up of FinTech credit varies with the entrepreneur’s bank distance. Proximity to the branches of the five largest stateowned banks correlates positively with the take-up of FinTech credit and suggests more severe credit frictions for Chinese e-commerce vendors close to such banks. We use a discontinuity in the credit decision algorithm to document that a firm’s credit approval and credit use boost a vendor’s sales and transaction growth. Entrepreneurial growth after access to FinTech credit is largest for younger e-commerce firms and in the month of first-time credit approval.

Keywords: FinTech; credit constraints; micro credit; entrepreneurship (search for similar items in EconPapers)
JEL-codes: G20 G21 O43 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2021-03
New Economics Papers: this item is included in nep-ban, nep-cwa, nep-fdg, nep-isf, nep-pay and nep-sbm
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2147

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